Hi everyone, this is my first post this forum so I would like to say hello to all its members and say how relieved I am to find a place to talk about the kinda things that happen in this business with people(you) who understand.
I'm assistant manager of a large, 1000 unit, indoor storage facility in central Canada and here's my question...
When to draw the line on overdue tenants?
First let me explain that our lease doesn't work like most of yours from reading some of the threads here. My leases are a commercial lease and give me the power to dispose of a lockers contents without any liability whatsoever 10 days after non-payment. I do not have to advertise or sell the contents, they can go right to the dump if I so choose. Bet some of you wish you had such a lease from what I have read here. LOL
We do not normally, except in extreme cases, use this power but wait 90 days before we send a registered letter/final notice as you all do. My experience is that if I wait in some instances up to around 4,5,6 months the tenant will come up with the money and everything is OK, but some will make BS arrangements again and again untill I'm fed up and there goes the tenants stuff. Of coarse by that point the bill has ran up to 4,5,6 months and I've double lost out because as we all know if the contents of the locker were worth anything, it would have been paid for but now I pay to dispose of it aswell.
I know most of you don't have this kinda problem because of the legalities of where you are located, but I'm interested in hearing your opinions on this matter. Am I a crazy for keeping a overdue locker around for 4,5,6 months hoping the the tenant will show with the money? I don't know about any of you, but throwing out an old laddies worldy possessions or a single mothers kids stuff really doesn't make me smile.
to your question at the end, you are not crazy but you are also not doing yourself any favors by not enforcing the terms of your contract. Your tenants don't take the rules seriously because you do not appear to, either.
Since you are looking for opinions, here's mine: follow through on the wording of your contract. On day 11, start hauling out the contents from delinquent units. What you do with them at that point is up to you but ignoring your own rules means that tenants will ignore them, too.
Be upfront about the rules when folks rent a unit, have them initial the 10-day clause to make sure they see it, then enforce it. Word gets around when people actually take action against people who drag their feet in paying or are actual deadbeats. You're not "throwing out" anyone's possessions; you are a business with rules and guidelines, one of which is not storing people's things for free. If you get an attack of conscience, set aside an area for displaced goods so the owner can reclaim them, pay you any outstanding balance, and then haul the stuff to someone else's property.
If I started pulling locker contents on day 11, my god I would have 300 lockers to empty. I have had a 74-75% occupancy rate for the last 8 years, and usualy have about 10-15 new tenants a month, but also lose roughly 10 tenants a month. In most cases I agree with you about following the letter of the contract, I do not tolerate deadbeats, but I have some instances where a customer has not missed a single payment in 10 years and suddenly the credit card expires and no matter how hard I try to contact them, I never get a reply. Personally I feel I owe a customer like that some extra time for their patronage because if I wait he/she could show up and continue to rent for a further 10 years. Tenants who are late on a regular basis, I have no compassion for, but if they are part of that 34% of my tenants who have stored over 10 years or longer with us, I don't quite know yet when to draw the line.
As for when it comes to a poor little old laddies stuff, what do we achieve by selling or tossing it out. If the locker has a high value thats one thing, we are a business and like to cover our debts, but if its all wothless keepsakes with meaning only to the old lady, what have we done? Taught her a lesson? I'm sorry but I wont do it, my manager has told me to simply ask the tenant to remove it in such cases. I would have junked it anyway so at least I save on the garbage bill.
Last edited by BigJ; 1st December 2009 at 10:34 PM.
then you need a middle ground that makes sense, maybe like overlocking folks on day 11 and their having to pay rent plus a late fee to get back into their units. If you are looking at upwards of 300 late payers, your current policy isn't working.
Rules have to be meaningful in order to work and it doesn't sounds like many of your customers believe you'll toss their stuff on the 11th day. So, maybe you revisit the tenant agreement; overlocking and late fees give you some leverage, and they are rules you can enforce without having to resort to more drastic measures.
I think other managers will tell you that a lot of their job is done by "feel", like giving a break to customers who've been with you a long time and generally do the right thing. I understand compassion and heroic customer service but this issue sounds like it is causing you some heartburn.
Amen to what Alex has been saying -- what is the use of having rules if they are not enforced.
You need to put some teeth into your rules and then start enforcing them. Sure you don't want to throw out their stuff after 11 days, but you also don't want them to not pay (and have access) for 4 to 6 months without any penalty!
I say change the wording of your contract and include overlocking and late fees.
All arguments can be resolved ... with high explosives and Humor!!!
My customers do pay a late fee after the 7th, we give them 1 weeks grace. Access to the locker is also denied after the 15th. Those who pay after the 7th know the late fee is due and do not argue it, so if they don't care about paying the fee thats their choice and it increases our profit.
We choose to work with the 90 days before final notice because lets face it, I would lose too many a good customer by enforcing the 10 day clause, some people really do forget or may be on the road. I certainly do not end a month with 300 overdue accounts. They will be in in time, and those who repeatedly are overdue find a eviction notice in the mail very quickly.
Its the rare case that I have "heartburn" over. As I said, if someone stored with you for 10 to 20 years, without EVER being late, don't we owe them some time? I had a case where a 15 year tenant went oversea's for a wedding and decided to stay for a extra 6 months. Needless to say his account ended up 8 months overdue and I finally foreclosed it and sent it to auction. Two days after I sent it to the auction he phoned in but by that point it was too late, even with him offering thousands of dollars to get his stuff back there was nothing I could do about it. Had I waited 2 days I would still have him as a tenant in a $300 unit for many years to come.
Trust me when I say our rules are enforced. Its these rare cases when I have a problem bringing the hammer down because they have been such great customers for years.
Last edited by BigJ; 30th November 2009 at 02:08 PM.
With the 15-year tenant, I imagine most folks would have done what you did but why is this your fault? You didn't leave the country for six months, he did. Would he expect to be carried by anyone else that he owed money for that long? That is on him.
As to other one-offs, that is what I meant earlier by going on 'feel'. After that much time, you have an idea of which customers are going to make good and which are not, so you use your instincts. If you are fairly sure they will pay, set the hammer to the side. But don't beat yourself up about the guy going overseas. That is a lack of responsibility on his part.
Thank you both for the replys. I try not to beat myself up over such cases, but I still can't help feeling down over it sometimes. Thats why this forum is great, you all know how it is and have probably been there yourself. Some of my long term tenants have been here over 25 years and I have never met or spoken to them because they always pre-pay the year by the credit card they left on file, so I have no way of having a "feel" for them if they suddenly disappear or stop paying.
I guess we just have to roll with the blows once in a while, but damn it sucks to lose long term tenants like that, especialy when they show up after you finally took action and its too late.